September 18, 2024
Dear Valued Partner,
We are bringing the below developments to your attention as they may impact your supply chain.
Negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) over a labor contract for eastern US port workers have thus far not yielded a new agreement. An October 1 strike targeting US East and Gulf Coast ports has been called by the union.
Compass is closely monitoring these negotiations and is speaking daily with terminals, steamship lines, and drayage providers to continuously assess the situation. While it is impossible to forecast what may happen in October, the below includes potential fallout from the labor dispute as the strike date approaches:
- Increased demand on multimodal systems such as railroads as freight gets rerouted to ports not impacted by the strike. Similar increases in airfreight demand are also possible – especially from gateways such as JFK/EWR, ORD, IAD, ATL, MIA, IAH, DFW – as priority freight is escalated from sea freight to air. This could lead to tightened capacity and upward movement in market rates.
- Shortages of warehousing space in regions such as New York/New Jersey, Norfolk, Charleston, Savannah, Jacksonville, Miami, and Houston due to short-term storage demand for distressed freight. This will subsequently increase market prices for storage space.
- If the strike occurs, the inability to deliver export freight to or receive import freight from US East and Gulf Coast ports. Effected ports would include Boston, New York/New Jersey, Philadelphia, Norfolk, Charleston, Savannah, Jacksonville, Miami, New Orleans, and Houston.
- The strike would also trigger ocean carrier schedule disruptions on a global level.
Our customer service team is available to guide you through these challenging times and to assist with contingency planning. We will continue to monitor these developments and keep you updated via email, our website, and our LinkedIn feed.